Barely a week after negotiating the largest sovereign debt restructuring in history, the Greek finance minister, Evangelos Venizelos, has been elevated to the helm of Pasok, the country's embattled socialist party.

As thousands of Pasok members filed into polling stations to endorse the bullish politician – who was the sole candidate – Venizelos pronounced the start of a "new era" for a party whose popularity has plummeted as it has navigated Greece's financial crisis.

"This is the beginning of Pasok's quest to find its soul again," said the 55-year-old law professor, who replaces the former prime minister George Papandreou.

With general elections due to take place as early as 29 April, Venizelos's selection as leader of what has traditionally been the country's biggest leftist force is seen as key to political stability. In an economic climate that has become increasingly explosive, polls have shown other leftist groups and extremists gaining ground.

The finance minister, who is expected to resign from the post on Monday, is among Athens's most talented politicians, and his handling of the €206bn (£171bn) bond swap – the success of which surprised even the cynics – has won widespread plaudits.

"It's astonishing that a French-trained law professor who was not a typical expert in economics did so well negotiating what is one of the biggest financial experiments in modern global history," said Theodore Pelagidis, professor of economic analysis at the University of Piraeus.

"Because he is so mentally sharp he was able in record time to familiarise himself with exotic financial tools and procedures."

The deal, a precondition of further aid from Brussels, the European Central Bank and the International Monetary Fund (IMF), was closed after eight months of highly complex negotiations between Greece and private sector bondholders at the Washington-based Institute of International Finance.

Athens receives a first tranche of aid on Monday, exactly one day before it must repay €14.5bn in maturing debt.

The groundbreaking agreement, which slices €107bn from Greece's debt pile, appears to have eased fears of an imminent Greek exit from the eurozone, a scenario likened at the weekend to "opening the gates of hell" by the country's central bank governor, Giorgos Provopoulos.

"Fortunately the decisions by the Eurogroup and successful completion of PSI [bond swap] are making this scenario distant and give Greece the chance to enter, with hard work, a virtuous circle," he said.

Rebuilding Pasok

Pasok has an estimated 400,000 card-carrying members. Aides say if Venizelos's candidacy is endorsed by 100,000 it will have been a success, given the collapse in support for a party identified almost exclusively with the biting austerity demanded in exchange for aid.

Elected to power with a landslide victory in October 2009, the socialists' ratings have crashed to around 10%, levels not seen since the party, founded out of an anti-junta resistance movement by George Papandreou's father, Andreas, was first voted to parliament in 1974.

"Venizelos has earned the respect of everyone, even his fiercest enemies, with the stamina he showed handling the PSI," said a government official referring to the debt restructuring. "But the one-million-dollar question now is will he be able to rebuild Pasok?"

Capitalising on the agreement is unlikely to be enough. Under extraordinary pressure to deliver on their promise to modernise the economy by enacting unpopular reforms, Greek politicians must walk the tightrope of pleasing creditors while placating an increasingly angry populace.

Speaking to Sunday's To Vima, Poul Thomsen, the IMF mission chief to Greece, said that while the debt swap provided a necessary breathing space to enforce change, "continued international support depended on stable progress."

It was, he said, the country's last chance. A third rescue package – already being discussed in view of the austerity-driven economic death spiral gripping Greece – was "off-limits".

"If that happens there will be a problem," he told a local radio station, adding that public utilities that had "outlived" their purpose had to be closed immediately.

No one is more aware of the demands now being made of Greece than Venizelos. Insiders say the finance minister had "three frank discussions" with his German counterpart, Wolfgang Schauble, in which he was told, bluntly, that Athens either enact growth-enhancing structural reforms or "be left out of the eurozone".

As the man most associated with painful fiscal policies, his first act as finance minister last July was to push through a €28bn package of austerity cuts that included a deeply unpopular privatisation drive – measures that prompted an orgy of violent street protests.

With recession set to further erode Greece's economic output – GDP has fallen by a cumulative 20% since 2008 – and an army of international "supervisors" about to descend on Athens permanently, resentment over policies that are also seen to impinge on the nation's sovereignty have far from abated.

Instead, Venizelos, who becomes Pasok's fourth president, takes over a party that is not just floundering but fighting for its life.